Author: Tom

Investing into volatility products (volatility investing) is not a very widespread topic in the area of financial investing products. Let’s shortly define what is meant with volatility investments. The term volatility refers to the movement of a certain price of a given underlying; this can be an index, a stock or every other product class.

For measuring the volatility, I personally use the VIX index which basically expresses the volatility in the S&P 500 ($SPX) Index. Volatility increases at sharp and fast price movements which is mostly the case in bearish markets. It declines in calmer market conditions and therefore mostly with rising index prices.

Usually bearish markets can additionally to a chart pattern also be seen at the current volatility levels whereas a good indicator is a VIX Index level above 20. Such conditions which could be seen in August 2015 or beginning of 2016 usually go ahead with falling index prices and increasing volatility, therefore it makes sense to invest into Volatility products as these in my opinion are a more safer bet in investing then a direct stock investment(I’am refering to long stock positions in bearish market environments) in bearish markets due to the fact that a rising market will force Volatility to go down again and you can make a nice profit.

Such an investment chance showed itself in mid-February and I invested into the inverse volatility ETF SVXY, since then there was a rise of more than 30% in one month. For me this investment was more of a long-term investment as I’m currently not invested with any bullish positons in any Stock or Index, at least in my investment account due to the fact that we are still in a bearish market situation at a long-term view. Just one side note, I mentioned that I tread this volatility trade like an investing position nevertheless I secure it with stop loss according to chart-pattern and try to not keep it for too long. (more than a year)

For a detailed view in the trade see the chart below with the low in mid-February of around 30USD, currently the ETF trades at ~47,4USD. (You can check charts for free on stockcharts.com)

If you are interest in volatility trades to support the performance of your investment portfolios just let me know and I can provide more information in future posts.

When we talk about alternative investments, this term has a whole different spectrum as conventional investing respectively the view on conventional investments includes classically only financial products like funds, further real estate and commodities like gold and silver. But alternative investments are defined in the following main areas, or let’s say this is how I see the main areas of alternative investments:

Just to give you a quick overview of the mentioned areas, managed funds in the sense that I will refer to it relates to small funds managed by individual traders, most of them are primarily trading their funds with options strategies as it gives good opportunities for income trading. Crowd investing in real estate and in start-ups is basically self-explanatory. Investments in infrastructure relates to state owned or private company investments whereas these companies contribute to the infrastructure system. Venture capital comes down to bigger crowdfunding investors or business angel’s starting in the range of 50.000 to 100.000 USD per investment. Investments in commodities are also pretty straight forward but I will show you how to find niches in the commodities section to achieve very good returns especially in focusing on collectors items in relation to commodities.

In terms of risk and return one could think that alternative investments in general are just not the right thing for risk-averse investors but I think it depends really on what you do and how you do it.Like conventional investments, also alternative investments depend on economic cycles which have their downs and up every now and then, the cycles of booms and depression. Therefore a healthy Portfolio management of your whole range of products in which you are saving money and invest can provide a very good basis for your money and reduces big ups and downs.

In my following articles for this section I will provide many examples for alternative investment opportunities were I see good chances to easy and risk-averse success, also some examples of investing opportunities I took and made money from.

According to the newest Integral survey on behalf of Erste bank(survey of austrian savers), an Austrian banking institute, nearly 80% of Austrians residents are saving some money of their salary. From that 80% almost 60% put their savings into saving accounts at an annual return of 0,01-0,6% before taxes! Another 28% are willing to put their money in pension plans which have a very long run-time but at least some serious amount of return in the lower single-digit area and some tax bonuses. 15% of the savers are planning to put some money into real estate and only 11% would be willing to invest in the stock market.

In my opinion that’s a very frightening development. On the one hand the central European area especially Austria and Germany have already a very high amount of tax burden, additionally inflation is increasing and due to the worsening development of the financial markets ECB is forced to reduce the base interest rate to almost zero. On the other hand people don’t start to change their behaviours of saving or investing their money and therefore are extradited to a tremendous loss of their saving’s respectively their buying power.

To conclude the situation, I think that it’s necessary to bring education about money and how to handle money, especially savings and investment more into focus of the broad public. I don’t think that it’s the responsibility of banks to tell you as a citizen what to do. One obvious truth about that is that banks are acting in reality as profit making companies they are always acting in their own interest. To support this statement think about the fact that in recent years so many electronic currencies like Bitcoins or Litecoins were developed and that with great success, moreover think also about the new Fintech age we are facing now in the start- up scene.

Welcome to my investing blog (investinstuff.com), my name is Tom and my goal is to show you various investment opportunities both with common financial products but also with different stuff or let’s say alternate investment style.

Currently after everything is setup and running I plan to post at least once a week on the weekends but also in between if some good investment opportunities come up to my mind which I want to share with you guys.

If you have a topic you want to address, please leave a comment below!

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